Bankruptcy

Grand Rapids, Michigan Bankruptcy Lawyers

Declaring bankruptcy is a legally sound, effective way of wiping out unsecured debt, reorganizing personal debt, or restructuring business debt. Given the current economic crisis, sometimes banks are willing to modify mortgages, credit card rates, and business loans in order to avoid foreclosures and default. However, if a loan modification or work-out is not possible, declaring bankruptcy may be your only option. At the law office of Howard, P.C., our attorneys work closely with individuals and business clients in order to evaluate their financial situation and the legal options available to them. Our office prepares and files all necessary paperwork, handles calls from collection agencies and creditors, works closely with court-appointed trustees, and counsels clients in re-establishing their credit rating.

If you are unable to pay your monthly bills or are facing foreclosure, contact the bankruptcy law attorneys at the law office of Howard, P.C. today and schedule a free consultation to learn how we can help you.

Chapter 7 Bankruptcy Law

In order to file under Chapter 7, a person must first meet certain income requirements. If you qualify, Chapter 7 bankruptcy allows you to cancel unsecured debt on credit cards and certain kinds of loans. However, student loans and child support payments cannot be discharged through Chapter 7. In general, once you file for Chapter 7, the court will sell or liquidate any assets it believes are luxury items you don't need. Consequently, you may lose your car, appliances you've bought on credit, or other items.

While there is a homestead exemption of $125,000 under Chapter 7, if you cannot pay your monthly mortgage you could lose your home. In some cases, however, banks are willing to modify a subprime mortgage to a fixed rate. This may extend the life of your loan but it should reduce your monthly payment as well.

Chapter 13 Bankruptcy Law

If you do not qualify for Chapter 7 bankruptcy, you can file under Chapter 13. Under the terms of Chapter 13, a person's-or business'-debt is reorganized according to a plan approved by one's creditors. A trustee is appointed by the court, tasked with making sure the terms of your repayment plan are adhered to. While Chapter 13 does not wipe away unsecured debt, it restructures it so you can pay back 80% - 100% over a 3 to 5 year period. As a result, most people who file for Chapter 13 bankruptcy are able to keep their homes, cars and other items that a chapter 7 would prohibit.

Business Debt - Filing for Chapter 11 Bankruptcy

Businesses filing for bankruptcy can restructure their debt under the terms of Chapter 11 bankruptcy. If a business is having difficulty staying current on accounts payable, or loans from a bank, declaring bankruptcy under Chapter 11 can allow a company to stay in business while reorganizing its debt. If creditors believe they stand to recover more money under Chapter 11 bankruptcy as opposed to liquidating a company's assets, they are more likely to agree to a repayment plan.

Even if a company is not in debt, it may still be forced to file for Chapter 11 bankruptcy. If a company is "out of formula" - a situation where a company's assets are deemed insufficient for maintaining the terms of a loan - a bank may demand immediate repayment, forcing a company into Chapter 11.

Contact Bankruptcy Attorneys at Howard, P.C. Today

We have the knowledge and experience to help homeowners and businesses facing foreclosure due to mounting debt. To schedule an appointment to discuss the options available to you, contact the bankruptcy lawyers at Howard, P.C. today. Then we can explain the simple steps you can take to re-establish your credit and regain your financial footing.